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BlackRock reports Q4 diluted EPS of $1.62 ($2.39 as adjusted), AUM of $3.346 tln at December 31

Wednesday, January 27, 2010
Opalesque Industry Updates - BlackRock, Inc. today reported fourth quarter 2009 net income1 of $256 million, up $204 million compared to 2008. The Barclays Global Investors (“BGI”) transaction closed on December 1, 2009 and contributed $94 million to fourth quarter net income, more than offset by a $108 million after-tax expense associated with BGI transaction and integration costs. Operating income was $389 million and non-operating income, net of non-controlling interests, was $17 million. The operating margin was 25.2%, which included the impact of $152 million of pre-tax BGI transaction and integration costs.

BlackRock’s results reflect the acquisition of BGI, continued positive business momentum, net asset growth and improvements in the external market environment. Fourth quarter net income, as adjusted, was $2.39 per diluted common share or $379 million, up more than three and a half times compared to fourth quarter 2008 diluted EPS of $0.66 and up 14% from the third quarter. Net income, as adjusted, for the full year 2009 was $1,021 million, an increase of 19% compared to 2008.

Revenue was $1,544 million, up 45% compared to fourth quarter 2008 and 35% compared to third quarter 2009. Fourth quarter 2009 revenue included $278 million of base fees associated with the $1.85 trillion of acquired BGI assets under management (“AUM”), revenue associated with $62.6 billion of net new business and net market appreciation and $125 million of combined firm performance fees.

Fourth quarter 2009 included as-adjusted operating income of $2.34 per diluted share and as-adjusted net non-operating income of $0.05 per diluted share. Operating income, as adjusted, of $561 million improved $191 million or 52% compared to 2008 and $161 million or 40% compared to the third quarter, explained partially by $141 million of operating income resulting from the BGI acquisition. The operating margin, as adjusted, for fourth quarter 2009 remained strong at 39.7% reflecting revenue growth and continued cost control. The 2009 compensation to revenue ratio was 35%, consistent with 2008 and 2007, excluding integration costs, LTIP and market valuation changes on deferred compensation plans.

Fourth quarter 2009 net non-operating income, as adjusted, of $13 million compares to a non-operating loss of $270 million in 2008 and non-operating income of $52 million in the third quarter. Fourth quarter non-operating income included interest expense on our $2.5 billion long-term note issuances on December 10th... Full press release: Source

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